Can we buy this house?

Question

This is basically two questions. Part one, can we get a mortgage. Part two, should we buy a house.

Our gross income is about 71,000

Our credit is pretty good, but we both just turned 23 so it's not very well established

We do have two car loans (i know.. i know.. tell my husband) and two student loans. Both car loans and the student loans total about $750 a month

We have about $10,000 in the bank for a down payment (about 3,000 separately in our emergency fund)

The house we love is currently listed at 129,900. They're pretty desperate to sell it, the sellers have already moved and their lease is about to run out. However, we're under a lease of our own until January 1, so we really wouldn't want to close until December. Is that too far out? What would someone offer in the current market?

And yes I know I should get a buyer's agent (assuming I can get a mortgage), but the one I want to work with most is selling this particular house, so I'm just waiting to see what happens. :)

THANK YOU!

Answer 1

From what I understand banks will loan you 2 to 2.5 times your yearly gross for a mortgage. Considering the current economy this might no longer be the case ... but I also believe this was way too high a number.

If your gross is 71,000 .. at 129,000 this comes to 1.81 times your yearly gross. With the $750 I still think you can do it .. may be a bit tight initially. Only issue I see here is whether or not your credit is good enough to qualify you.

Check your current lease. From what I understand some leases allow you a way out if you are moving due to your job or purchasing a home. Wouldn't hurt to read it to find out. Good luck!

Answer 2

I don't know how you'll find a loan w/o 10 or 20% for the down payment, but it's definitely worth a shot.  Kind of sounds like you two are still in too much debt (student loans).  Find the loan first, then shop for houses.

Answer 3

it depends on the interest rate of the mortgage. You definately want a fixed rate mortgage, because the ajustable rates can go way tooooo high. You also want to figure out your monthly income after expenses. This is the total amount coming in after taxes are taking out subtracted by your current obligations/payments.  You want atleast 200 for food per month so consider that as a factor. There are a few website mortgage calculators that can tell you what the monthly payment would be at a specific interest rate. But that is how you figure out if you can afford it or not.

The best thing to do is get pre approved by the bank for a certain loan amount and then find a house in that price range.